2011/12/13 by Marco Dueñas, Marco Duenas, Duenas, Marco +2
Economics, Econometrics and Finance · Mathematics · Physics and Astronomy · #Architecture #Bilateral trade #Binary number #Business #Computer science #Data Analysis #Econometrics #Economic and Technological Innovation #Economics #Estimation #FOS: Economics and business #FOS: Physical sciences #Flow (mathematics) #General Finance (q-fin.GN) #Geography #Geometry #Global trade and economics #Gravity equation #Gravity model of trade #International trade #Mathematics #Physics and Society (physics.soc-ph) #Statistics and Probability (physics.data-an) #physics.data-an #physics.soc-ph #q-fin.GN
paper · pdf · doi:10.48550/arxiv.1112.2867
arxiv created 2011/12/13 · openalex publication_date 2011/12/13 · arxiv updated 2011/12/14 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/05
This paper investigates whether the gravity model (GM) can explain the statistical properties of the International Trade Network (ITN). We fit data on international-trade flows with a GM specification using alternative fitting techniques and we employ GM estimates to build a weighted predicted ITN, whose topological properties are compared to observed ones. Furthermore, we propose an estimation strategy to predict the binary ITN with a GM. We find that the GM successfully replicates the weighted-network structure of the ITN, only if one fixes its binary architecture equal to the observed one. Conversely, the GM performs very badly when asked to predict the presence of a link, or the level of the trade flow it carries, whenever the binary structure must be simultaneously estimated.